Apple & Google Got it Right — Apps are About Retention!

There’s a lot of discussion right now about what will make apps more successful. There’s even been discussion that we’re seeing the end of apps. While it’s certainly true that some apps are failing, it’s a massive overstep to suggest the best days are behind them and that it’s time to look at the next thing. Instead, just like businesses were trying to figure out how to integrate the web into their go to market approach 10 or so years ago, the use of apps is going through a similar amount of soul-searching.

If You’re Focusing on the Top of the Funnel, You’ve Got it All Wrong

Apps are not an acquisition strategy, they’re a retention strategy. More precisely, apps are currently the best way to deliver a virtual personal assistant for your business to your most loyal customers. There is no other property that can reside on the homescreen of your customer’s most preferred device; listen and learn about your customer’s interests and preferences in real-time; and send your customers a bespoke message about something they deeply care about, right now.

While you need to acquire users before you can retain them, you will fail if your focus is solely on optimizing your cost-per-install.

Apple and Google realize this, and have both recently announced very strong incentives to app developers. Last week, each separately announced that they are increasing the revenue share from 70% to 85% for app developers who sign a new user up to a subscription model. For the Apple App Store, this will begin on month 13 of the subscription. For the Google Play store, it will begin immediately!

This is a very strong signal from the platforms about what they believe will drive long-term success. Just like the Federal Reserve manages interest rates to control inflation, the platforms are using subscription revenue to encourage developers to focus on retention.

Addressing Mobile App Retention: A Refresher

Now that the market conditions have tipped in your favor, here are a few additional ideas to help you get your mobile app retention mojo going:

Solve a Problem Only Mobile Can Solve

It may seem obvious, but the first step in figuring out a winning app strategy is determining the specific problem your app can uniquely solve that you can’t solve in your other business channels. Hint: this isn’t replicating your website experience.

A good place to start is by focusing on what the immediacy, simplicity and convenience of mobile allow you to solve for your customers. For example, the Cleveland Cavaliers are using their app as their fans’ mobile companion pre-game, in-game and post-game to create higher fan engagement.

Get the Mobile App Onboarding Series Right

The statistics don’t lie. Ask any industry veteran and they’ll tell you that you’ll lose 80-90% of new install traffic to your app in the first week. You can cut that amount of churn in half with push and in-app notifications. There’s no better way to get started on the right foot than with a welcome series that clearly explains how to get started, why users should opt-in to push notifications and the benefits of sharing location to get personalized messaging. Do these three things well and you’re sure to increase retention rates for the long-term.

Banish the Funnel, Embrace the Loop

Lastly, re-orient your marketing approach away from the traditional linear funnel and towards a feedback loop-based model that is representative of the two-way relationship you have with customers. Because the app is always with your customers and is able to listen and learn about their preferences at each stage in the customer journey, you have the opportunity to tap into feedback loops of communication.

When your customers go through the onboarding process, you can pick up valuable signals about the type of information and offers they want to receive. They provide specific details of how and when they want to be reached. With these data signals at your disposal, you can personalize communication to them that will help your messaging break through, get noticed and deliver a measure of utility that only apps can provide.